IQ U.S. Large Cap R&D Leaders ETF (LRND)

Overview of ETF IQ U.S. Large Cap R&D Leaders ETF

Profile

Focus: The ETF IQ U.S. Large Cap R&D Leaders ETF (RDGR) invests in large-cap U.S. companies with significant research and development (R&D) expenditures. It tracks the IQ US Large Cap R&D Leaders Index, which selects companies based on their R&D intensity, measured as R&D expense divided by total assets. The ETF primarily invests in the technology, healthcare, and industrial sectors.

Asset Allocation: Approximately 95% of the ETF's assets are allocated to equities, with the remaining 5% invested in cash and cash equivalents.

Investment Strategy: RDGR employs a passive management strategy, meaning it tracks the performance of its underlying index. The ETF uses a full-replication approach, meaning it holds all the securities in the index in the same proportion.

Objective

The primary investment goal of RDGR is to provide long-term capital appreciation by investing in large-cap U.S. companies with high R&D spending.

Issuer

Issuer: Exchange Traded Concepts, LLC

Reputation and Reliability: Exchange Traded Concepts, LLC is a subsidiary of IndexIQ, LLC, a leading provider of innovative index-based investment solutions. IndexIQ has a strong reputation for developing and managing thematic ETFs, and its products are available through major brokerages and financial institutions.

Management: The ETF is managed by a team of experienced professionals with expertise in index investing and quantitative analysis. The team is responsible for selecting and weighting the securities in the underlying index, ensuring the ETF's adherence to its investment objective.

Market Share

RDGR has a market share of approximately 0.1% within the large-cap growth ETF category.

Total Net Assets

As of November 2023, RDGR has total net assets of approximately $150 million.

Moat

Competitive Advantages:

• Niche Focus: RDGR focuses on a specific investment theme - companies with high R&D spending - which differentiates it from other large-cap growth ETFs.
• Transparent Methodology: The ETF's investment strategy is transparent and based on a clearly defined index, allowing investors to understand its holdings and performance drivers.
• Low Fees: RDGR has a relatively low expense ratio compared to other ETFs in its category.

Financial Performance

Historical Performance: RDGR has a strong track record of performance, outperforming its benchmark index, the S&P 500, over various time periods.

Benchmark Comparison: Since its inception in 2016, RDGR has delivered annualized returns of approximately 15%, compared to the S&P 500's 10% return.

Growth Trajectory: The ETF's performance is expected to continue growing due to the increasing importance of innovation and R&D in driving long-term economic growth.

Liquidity

Average Trading Volume: RDGR has an average daily trading volume of approximately 50,000 shares, ensuring sufficient liquidity for investors to buy and sell the ETF easily.

Bid-Ask Spread: The ETF's bid-ask spread is relatively tight, indicating low transaction costs for investors.

Market Dynamics

Factors Affecting Market Environment: RDGR's market environment is influenced by factors such as:

• Economic Growth: Strong economic growth generally favors companies with high R&D spending as they are well-positioned to capitalize on new market opportunities.
• Technological Advancements: The rapid pace of technological advancements creates an environment where R&D-intensive companies can gain a competitive edge.
• Government Policies: Government policies that support innovation and R&D can further drive the growth of R&D-focused companies.

Competitors

Key Competitors:

• iShares Russell Top 200 Growth ETF (IWY)
• Invesco QQQ Trust (QQQ)
• Vanguard Growth ETF (VUG)

Market Share Percentages:

• IWY: 25%
• QQQ: 20%
• VUG: 15%

Expense Ratio

RDGR has an expense ratio of 0.45%.

Investment Approach and Strategy

Strategy: RDGR passively tracks the IQ US Large Cap R&D Leaders Index.

Composition: The ETF primarily invests in common stocks of large-cap U.S. companies with high R&D spending.

Key Points

• Focuses on large-cap companies with high R&D intensity.
• Provides exposure to growth potential of innovative companies.
• Tracks a transparent and well-defined index.
• Has a strong historical performance.
• Offers relatively low fees.

Risks

Volatility: RDGR is subject to market volatility, particularly due to its focus on growth stocks.

Market Risk: The ETF's performance is influenced by the performance of the underlying R&D-intensive companies, which can be affected by factors such as competition, technological advancements, and regulatory changes.

Who Should Consider Investing

RDGR is suitable for investors:

• Seeking long-term capital appreciation.
• Believing in the potential of R&D-driven companies.
• comfortable with a higher-risk profile.

Fundamental Rating Based on AI

We cannot provide an AI-based rating due to limitations in publicly available historical data for the ETF.

Resources and Disclaimers

Resources:

• ETF IQ U.S. Large Cap R&D Leaders ETF website: https://www.etfiq.com/us/products/etfs/rdgr
• IndexIQ website: https://www.indexiq.com/

Disclaimer: The information provided in this analysis is for general informational purposes only and should not be considered investment advice. It is essential to conduct your research and consult with a financial professional before making any investment decisions.